National Insurance change will save workers £205

Nearly 30 million UK workers will see their taxes cut following Chancellor Rishi Sunak's raising of the National Insurance (NI) earnings threshold.

Figures from the Office for National Statistics (ONS) show the median salary for full-time workers in Sunderland was £24,961 in 2021 – with employees currently paying NI on 12% of their annual earnings over £9,568, meaning a worker on this wage would pay around £154 a month.

In his spring statement, Mr Sunak announced that the earnings threshold will rise to £12,570 from July to mitigate the increasing cost of living – meaning a worker in Sunderland earning the media salary for the area will pay £205 less per year than they do now.

Mr Sunak hailed the move as “a £6bn cut in personal tax cut for 30 million people.”

But anti-poverty campaign group, the Resolution Foundation, said the policy was “big but poorly targeted”.

It estimates that 1.3 million people are set to fall below the poverty line next year, including 500,000 children – only one-in-eight workers will actually see their tax bills fall.

Resolution Foundation chief executive Torsten Bell said: “Rishi Sunak has prioritised rebuilding his tax-cutting credentials over supporting the low-to-middle-income households who will be hardest hit from the surging cost of living, while also leaving himself fiscal flexibility in the years ahead.

“Whether that will be sustainable in the face of the huge income falls to come remains to be seen.”